Foreign exchange reserves fall below $9 billion

A worker at a currency exchange office holds a stack of U.S. dollar banknotes before giving them to a customer in Jakarta, October 8, 2015. – Reuters/File
  • According to SBP, the decline is due to foreign debt payments.
  • Net reserves held by banks amount to $5,839.5 million.
  • Pakistan has an import cover of less than 1.5 months.

KARACHI: The country’s foreign exchange reserves held by the State Bank of Pakistan (SBP) continued to decline on a weekly basis.

On July 22, foreign exchange reserves held by SBP were recorded at $8,575.16 million, down $754 million from $9,328.6 on July 15, according to data released by the SBP on Thursday. State Bank of Pakistan (SBP).

According to the central bank, the decline is due to foreign debt and other payments.

—JS Global
—JS Global

The overall liquid foreign exchange reserves held by the country, including net reserves held by banks other than SBP, amounted to $14,414.6 million.

Net reserves held by banks amounted to $5,839.5 million.

It should be noted that with the current position of foreign exchange reserves, Pakistan has an import cover of less than 1.5 months.

Meanwhile, the Pakistani rupee fell from Rs3.92 in a single day to hit a all-time low at Rs239.94 against the dollar in the interbank market today; however, the SBP cannot smooth out the disorderly movement due to the limited foreign exchange reserve position, as well as consolidations from International Monetary Fund (IMF) considerations.

However, with Pakistan having reached a staff-level agreement with the Fund, foreign exchange reserves are expected to improve after receiving $1.17 billion from the global lender.

Emerging markets analyst Emre Akcakmak pointed out that Pakistan’s international reserves with the central bank continued to fall in the week ending July 22.

“Whether [country] does not receive a Chinese loan, the reserves would be $6.3 billion,” he warned.

Taking to his Twitter, the analyst said the pace of withdrawal is not slowing down. “It’s accelerating. The Pakistani rupee is getting weaker because it can’t go on forever,” he added.